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JPMorgan (JPM) to Buy Renovite, Expand Payments Processing

·3 min read

To further modernize and bolster its payments processing platform, JPMorgan JPM has announced a deal to acquire Renovite Technologies, Inc. The financial terms of the deal haven’t been disclosed yet.

Based in Fremont, CA, Renovite is a “cloud-native payments technology company.” It has developed “six proprietary, cloud-agnostic and payment token agnostic payments products to help their clients to optimize infrastructure.” The firm has offices in India and the United Kingdom and has been offering services to JPMorgan since last year.

Following the completion of the transaction, which is still subject to customary closing conditions, Renovite will become part of J.P. Morgan Payments. This will further help bring an integrated payments experience to its clients globally. It will aid J.P. Morgan Payments’ expansion efforts in the cloud and strengthen the company’s payments upgrading initiatives.

Per Max Neukirchen, Global Head of Payments & Commerce Solutions at JPM, “We are excited to acquire Renovite and accelerate our roadmap for helping our clients stay at the cutting-edge of payments innovation. This acquisition will help us achieve our goal to develop the next-generation payments processing platform globally.”

The transaction will hugely complement JPM’s planned strategic investment in Greece-based Viva Wallet (still subject to regulatory approvals) and the partnership with Volkswagen Financial Services AG.

Mike Blandina, Global Head of Payments Technology at JPM, noted “Renovite’s cloud-native merchant acquiring capabilities are already helping us better serve our clients. As the Renovite platform integrates with J.P. Morgan Payments, merchant acquiring clients will be able to accept more methods of payments around the globe to help grow their business.”

JPMorgan has been tremendously spending on technology to provide advanced products and services for its clients. The company recorded a roughly 25% jump in ‘tech and tech-adjacent’ expenses over the last three years through 2021. The same is projected to rise nearly 20% this year on efforts to bolster cloud capabilities, digital consumer experience, data centers and data & analytics.

Shares of this Zacks Rank #3 (Hold) company have fallen  24.7% compared with the industry’s decline of 17.9% so far this year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Similar to JPMorgan, several banks, including Truist Financial TFC and Citizens Financial Group, Inc. CFG, are undertaking acquisitions to diversify revenues and improve market share.

Truist Financial aims to continue bolstering its insurance business. In sync with this, the company, through its subsidiary, Truist Insurance Holdings, announced an all-cash deal to acquire BankDirect Capital Finance for $3.4 billion.

Following the completion (expected to occur in the fourth quarter of 2022) of the transaction, BankDirect will operate as a unit of AFCO Credit Corporation, which is Truist Insurance’s current premium finance operation in the United States.

Likewise, Citizens Financial is on a buyout spree. This July, the company announced plans to acquire Paladin Advisors, an independent, registered investment advisor, to strengthen its private wealth management business.

Earlier, CFG closed the acquisitions of DH Capital LLC and Investors Bancorp. In February, it closed the buyout of 80 East Coast branches and the national online deposit business from HSBC Bank U.S.A, N.A. These and other buyouts enable the company to expand its product capabilities and geographic reach.

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